County to mull $369,000 in bank fees at next meeting

By Michael Todd Michael.Todd@JDNews.com

Published: Sunday, June 1, 2014 at 09:00 AM.

Onslow County pays no fees for banking at PNC Financial Services Group.

But that could change after the next county Board of Commissioners meeting 7 p.m. Monday at Jacksonville City Hall. The board will consider an agreement with PNC for projected average monthly banking fees of $6,266 for the next four years, according to the meeting agenda. If approved, the agreement could drain $369,694 from the Onslow County General Fund from Aug. 1 to June 30, 2019, for banking services.

The county’s bank contract will expire after July 31, Finance Officer David McCole said. PNC has withheld $500,000 of county money in lieu of service charges, he added.

“It was a sweetheart deal,” McCole said. “To have a deal like that now, you’d be required to have much more money.”

The amount held by the bank is called a minimum compensating balance. The banking customer has no control over it and that ties up more public money than the projected banking fees would, McCole said.

McCole said staff did not shop around to compare prices for banking services before filing the recommendation to the board.

“Because we’re getting a great deal,” he said. “A lot of different factors go into it. It is based on volume.”

PNC Corporate Communications spokeswoman Marcey Zwiebel would not disclose the factors that drive the costs of banking services or the factors that have raised banking fees.

“All contracts are different,” she said. “And we can’t comment on anything that would be specific to our customers.”

Changing banks would be a challenge for an agency of such size, Union County budget manager Andrea Robinson said.

By comparison, Union County’s population is about 17,700 more than Onslow County’s, according to the N.C. Office of State Budget and Management.

From April 2013 to March, that county paid an average $12,700 monthly for banking fees to BB&T, where it has affiliated for years, Robinson said.

“There are so many connection points that have to be resolved or recreated just to make a banking change,” Robinson said.

McCole said he reviewed industry standards before settling on the recommended fee rates at PNC.

“We could have paid a heck-of-a-lot more,” he said.

The City of Jacksonville renewed its contract with First Citizens Bank last year, said senior finance manager Allen Weeks.

To forgo banking fees, the city had to dedicate $2 million in its minimum compensating balance, he said. That minimum compensating balance rose from roughly $625,000 in the city’s last contract with BB&T, he added.

Every four years, the city sends requests for proposals to competing banks, Weeks said.

“We got bids from several different banks,” he said. “We owe it to the citizens of Jacksonville to get the best bang for our buck.”

Onslow County pays no fees for banking at PNC Financial Services Group.

But that could change after the next county Board of Commissioners meeting 7 p.m. Monday at Jacksonville City Hall. The board will consider an agreement with PNC for projected average monthly banking fees of $6,266 for the next four years, according to the meeting agenda. If approved, the agreement could drain $369,694 from the Onslow County General Fund from Aug. 1 to June 30, 2019, for banking services.

The county’s bank contract will expire after July 31, Finance Officer David McCole said. PNC has withheld $500,000 of county money in lieu of service charges, he added.

“It was a sweetheart deal,” McCole said. “To have a deal like that now, you’d be required to have much more money.”

The amount held by the bank is called a minimum compensating balance. The banking customer has no control over it and that ties up more public money than the projected banking fees would, McCole said.

McCole said staff did not shop around to compare prices for banking services before filing the recommendation to the board.

“Because we’re getting a great deal,” he said. “A lot of different factors go into it. It is based on volume.”

PNC Corporate Communications spokeswoman Marcey Zwiebel would not disclose the factors that drive the costs of banking services or the factors that have raised banking fees.

“All contracts are different,” she said. “And we can’t comment on anything that would be specific to our customers.”

Changing banks would be a challenge for an agency of such size, Union County budget manager Andrea Robinson said.

By comparison, Union County’s population is about 17,700 more than Onslow County’s, according to the N.C. Office of State Budget and Management.

From April 2013 to March, that county paid an average $12,700 monthly for banking fees to BB&T, where it has affiliated for years, Robinson said.

“There are so many connection points that have to be resolved or recreated just to make a banking change,” Robinson said.

McCole said he reviewed industry standards before settling on the recommended fee rates at PNC.

“We could have paid a heck-of-a-lot more,” he said.

The City of Jacksonville renewed its contract with First Citizens Bank last year, said senior finance manager Allen Weeks.

To forgo banking fees, the city had to dedicate $2 million in its minimum compensating balance, he said. That minimum compensating balance rose from roughly $625,000 in the city’s last contract with BB&T, he added.

Every four years, the city sends requests for proposals to competing banks, Weeks said.

“We got bids from several different banks,” he said. “We owe it to the citizens of Jacksonville to get the best bang for our buck.”